Home  »  Company  »  Kokuyo Camlin  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Kokuyo Camlin Ltd.

Mar 31, 2018

1 BACKGROUND OF THE COMPANY

Kokuyo Camlin Limited (the “Company”) was incorporated in India in 1946 as “Camlin Private Limited” under the Indian Companies Act, 1913. Subsequently, the Company was converted into a Public Limited Company in 1988 as Camlin Limited and was listed on BSE Ltd (BSE) and listed on National Stock Exchange of India Ltd (NSE) in the yeaRs.2008. In the yeaRs.2011, Kokuyo S&T Co. Ltd, (now Kokuyo Company Limited) a Japanese corporation engaged in the business of stationery acquired a majority stake in the Company and presently holds 74.44% shares in the Company.The registered office of the Company is located at 48/2, Hilton House, Central Road, MIDC, Andheri (East), Mumbai, India.

Kokuyo Camlin Limited manufactures, and trades in scholastic products, writing instruments, notebooks, marker pens, inks, fine-art colours and accessories, hobby colours, pencils and other stationery products.

2 BASIS OF PREPARATION

(a) Statement of compliance

These standalone financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 (‘the Act’) and other relevant provisions of the Act.

The standalone financial statements up to and for the year ended 31 March 2016 were prepared in accordance with the Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act.

As these are the Company’s first standalone financial statements prepared in accordance with Indian Accounting Standards (Ind AS), Ind AS 101, “First-time Adoption of Indian Accounting Standards” has been applied. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance and cash flows of the Company is provided in Note 30.

The Standalone financial statements for the year ended 31 March 2018 have been reviewed by the Audit Committee and subsequently approved by the Board of Directors at its meeting held on 9 May 2018.

Details of the Company’s significant accounting policies are disclosed in Note 3.

(b) Functional and presentation currency

These standalone financial statements are presented in Indian Rupees (INR), which is also the Company’s functional currency. All amounts are mentioned in lakhs and rounded off to 2 decimals unless, otherwise stated.

(c) Basis of measurement

(i) The standalone financial statements have been prepared on the historical cost basis except for the following assets and liabilities which have been measured at fair value:

1 Certain financial assets and liabilities (including derivative instruments and equity investments) -measured at fair value

2 Net defined benefit (asset)/liability - fair value of plan assets less present value of defined benefit obligations

(d) Use of estimates and judgements

“In preparing these standalone financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.”

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment is included in the following notes:

- Note 3.10 and 25 - recognition of deferred tax assets: availability of future taxable profit against which tax losses carried forward can be used;

- Note 3.14 and 27 - measurement of defined benefit obligations: key actuarial assumptions;

- Notes 3.15 and 18 - recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources;

- Note 3.04 & 3.13- impairment of financial and non financial assets.

- Note 3.02 and 3.03 - management estimate for useful life of plant and machinery, electrical installation and intangible assets.

- Note 29 - fair value measurement of financial instruments

(e) Current vs non current classification

Any asset or liability is classified as current if it satisfies any of the following conditions:

i. the asset/liability is expected to be realized/settled in the Company’s normal operating cycle;

ii. the asset is intended for sale or consumption;

iii. the asset/liability is held primarily for the purpose of trading;

iv. the asset/liability is expected to be realized/settled within twelve months after the reporting period;

v. the asset is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date;

vi. in the case of a liability, the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

All other assets and liabilities are classified as non-current.

For the purpose of current/non-current classification of assets and liabilities, the Company has ascertained its normal operating cycle as twelve months. This is based on the nature of services and the time between the acquisition of assets or inventories for processing and their realization in cash and cash equivalents”

(f) Fair value measurement

The Company measures certain financial instruments, such as derivatives and equity investments, at fair value at each balance sheet date.Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

A. In the principal market for the asset or liability, or

B. In the absence of a principal market, in the most advantageous market for the asset or liability.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as under, based on the lowest level input that is significant to the fair value measurement as a whole:

A. Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

B. Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

C. Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

Further information about the assumption made in measuring fair value is included in the following notes.

- Note 4(b) - Investment property

- Note 29 - Financial instruments

(g) Standards issued but not yet effective.

Ministry of Corporate Affairs (“MCA”) through Companies ( Indian Accounting Standards) Amendment Rules, 2018 has notified the following new standards and amendments to Ind AS which the Company has not applied as they are effective for annual periods beginning on or afteRs.1 April, 2018

Ind AS 115 Revenue from Contracts with Customers

Ind AS 21 The Effect of Changes in Foreign Exchange Rates

Ind AS 115 - Revenue from Contracts with Customers

On 28 March ,2018 the MCA, has notified the Ind AS 115, Revenue from Contracts with Customers.

Ind AS 115, establishes a comprehensive framework for determining whether, how much and when the revenue should be recognised. It replaces existing revenue recognition guidelines, including Ind AS 18 Revenue, Ind AS 11Construction contracts and Guidance note on Accounting for Real Estate Transactions. Ind AS 115 is effective for annual periods begining on or afteRs.1 April, 2018 and will be applied accordingly.

The Company is evaluting the impact of this amendment on its standalone financial statements.

Ind AS 21 - The Effect of Changes in Foreign Exchange Rates

The amendement clarifies on the accounting of transactions that include the receipt or payment of advance consideration in foreign currency. The appendix explains that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. The Company is evaluting the impact of this amendment on its standalone financial statements.

i) Terms/rights attached to equity shares

The Company has only one class of equity shares with a par value of INR. 1/- per share. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian Rupees.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to number of equity shares held by the shareholders.

ii) Shares held by the Holding/ultimate Holding Company and/or their Subsidiaries/ Associates.

Out of the equity shares issued by the company, shares held by its Holding Company are as under

iii) Details of shareholders holding more than 5% shares in the company

Other than Kokuyo Co. Ltd, there are no shareholders holding more than 5% shares in the Company.

General reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer.

Share premium

Share premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013.

Capital reserve

Capital reserve represents the grant received from government for set up of plant in specific area.

Capital management

The Company’s objectives when managing capital are to (a) maximise shareholder value and provide benefits to other stakeholders and (b) maintain an optimal capital structure to reduce the cost of capital.

For the purposes of the Company’s capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders.

The Company monitors capital using debt-equity ratio, which is total debt less investments divided by total equity.

Long term borrowing comprise

a) i) External Commercial borrowing (ECB) from Bank of Tokyo-Mitsubishi UFJ,Ltd. Singapore with carrying amount of INR Nil (31 March 2017 - INRS.542.21, 1 April 2016- INRS.1101.62)

The terms of the loan are as follows:

1. Rate of Interest is based on LIBOR plus agreed spread.

2. Repayable in 8 equal half yearly installments starting from 22 April 2014 with last installment payable on 18th OctobeRs.2017

ii) External Commercial borrowing (ECB) from Sumitomo Mitsui Banking Corporation with carrying amount of INRS.1528.52 (31 March 2017 - INRS.2,029.01, 1 April 2016 - INRS.2074.42)

The terms of the loan are as follows:

1. Rate of Interest is based on LIBOR plus agreed spread.

2. Repayable in 8 equal half yearly installments starting from 2 SeptembeRs.2017 with last installment payable on 2 March 2021.

b) i) The secured loan from HDFC bank is a vehicle loan with carrying amount of INRS.6.21 (31 March 2017 - INRS.9.46, 1 April 2016 - INRS.12.39)

1. Rate of Interest is 10.25 %p.a.

2. Repayable in monthly installments starting from DecembeRs.2014 with last installment payable on 7 NovembeRs.2019.

3. Secured against hypothecation of vehicle.

ii) The secured loan from HDFC bank is a vehicle loan with carrying amount of INRS.25.22 (31 March 2017- INR Nil, 1 April 2016 - INR Nil)

1. Rate of Interest is 8.50 %p.a.

2. Repayable in monthly installments starting from SeptembeRs.2017 with last installment payable on 5 August 2022.

3. Secured against hypothecation of vehicle. ii) Other financial liabilities

According to the requirements of Ind AS and SEBI (Listing Obligations and Disclosure Requirements),Regulations 2015, revenue for the year ended 31 March 2017 were reported inclusive of Excise Duty. The Government of India has implemented Goods and Services Tax (GST) from 1 July 2017 replacing Excise Duty, Service Tax and various other indirect taxes. As per Ind AS 118, the revenue for the period post 30 June 2017 is reported net of GST.

* Tax paid under protest as at 31 March 2018: INRS.36.22 lakhs (31 March 2017 - INRS.36.22 lakhs; 1 April 2016 - INRS.36.22 Lakhs).

c. Bank Guarantees

Bank Guarantees as on 31 March 2018 is INRS.105.43 lakhs (31 March 2017: INRS.159.93 lakhs, 1 April 2016 - INRS.93.93 lakhs)

3 EXCISE REMISSION AT JAMMU :

a. The Jammu and Kashmir High Court delivered a judgment dated DecembeRs.23, 2010 quashing the Excise Notification, applicable to the undertakings set up in Jammu, which restricted the quantum of excise duty remission and upheld the entitlement to total exemption from excise duty. In view of the legal advice confirming the Company’s right to such total exemption on the grounds laid down in the judgment of the High Court, rebate of excise duty being the duty on assessable value of goods, net of Cenvat Credit has been recognized in the books of accounts till February 2013.

b. A writ petition was filed by the Company praying the quashing of the impugned notification in its case. Pending final disposal of the petition filed by the Company, the Hon’ble High Court had modified the earlier interim order, passed on May 4, 2011, in OWP 601/2011 on March 11, 2013. Consequently the Hon’ble High Court has directed the department to release 50% of the amount due to the manufacturers, subject to the approval of Jurisdictional Commissioner of Excise for manufacturers’ solvency. Post such order the Company has claimed excise rebate as per the earlier quashed notification. The excise duty remission of INRS.97.27 lakhs (31 March 2017: INRS.322.19 lakhs) for the year is recognized as income from operations. The cumulative amount of remission as on March 31, 2018, so recognized is INRS.2,497.87 lakhs (31 March 2017: INRS.2,400.60 lakhs).

4 utilization OF PROCEEDS OF RIGHTS ISSUE :

On 2 SeptembeRs.2013, the Company pursuant to its Rights issue of equity shares allotted 31,283,831 Equity Shares of face value of Re. 1/- each to the eligible equity shareholders in the ratio of 14 equity shares for every 29 equity shares held on the record date i.e. 2 August, 2013 at a price of INRS.33/- per share (inclusive of Share Premium of INRS.32/- per share). The aggregate amount collected pursuant to the Rights issue was INR10,323.66 lakhs.

5 DUES TO MICRO AND SMALL ENTERPRISES

The Management has identified enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2018 has been made in the financial statements based on information received and available with the Company.

6 LEASES:

The Company has entered into operating leases on certain residential premises for employees, office premises, factory premises and godowns, with lease terms between one and five years. There are no restrictions of a material nature imposed by lease arrangements.

Lease rental expense debited to Statement of Profit and loss is INRS.1320.23 lakhs (31 March 2017: INRS.1361.06 lakhs).

7 EMPLOYEE BENEFITS :

Defined Contribution Plans

Company’s contributions paid/payable during the year to provident fund and superannuation fund are recognized in the Standalone statement of profit and loss. The contributions charged to the Standalone statement of profit and loss is INRS.309.42 lakhs (31 March 2017 INRS.323.01 lakhs)

Defined Benefit Plan

Company’s liabilities towards gratuity and leave encashment are determined on actuarial basis using the projected unit credit method, which consider each period of service as giving rise to an additional unit of benefit and measure each unit separately to build up the final obligation. Obligation is measured at the present value of estimated future cash flow using a discount rate that is determined by reference to market yields at the Balance Sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

Description of the Plan

The Company has covered its gratuity liability by a Group Gratuity Policy named ‘Employee Group Gratuity Assurance Scheme’ issued by LIC of India. Under the plan, employees at retirement is eligible for benefit, which will be equal to 15 days salary for each completed year of service. Thus, it is a defined benefit plan and the aforesaid insurance policy is the plan asset.

Expected Contribution

The expected contribution for defined benefit paln for the next financial year will be in line with the contribution for the period and is expected by the management to be INRS.200.00 lakhs (31 March 2017 INRS.249.95 lakhs).

Note on Sensitivity Analysis

1 Sensitivity analysis for each significant actuarial assumptions of the Company which are discount rate and salary assumptions as of the end of the reporting period, showing how the defined benefit obligation would have been affected by changes is shown in the table above.

2 The method used to calculate the liability in these scenarios is by keeping all the other parameters and the data same as in the base liability calculation except for the parameters to be stressed.

h Expected Future Cash flows

The expected future cash flows in respect of gratuity as Balance Sheet dates will as follows:

Other long term employee benefit - Compensated absences

The accrual for unutilised leave is determined for the entire available leave balance standing to the credit of the employees at the year-end. The value of such leave balances that are eligible for carry forward, is determined by an actuarial valuation as at the end of the year and acturial gains and losses are charged to the Statement of profit and loss.

8 FINANCIAL INSTRUMENTS - FAIRE VALUES AND RISK MANAGEMENT

A. Accounting classification and fair values

Carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy, are presented below. It does not include the fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

B. Measurement of fair values Fair value hierarchy/Valuation technique

No financial instruments are recognised and measured at fair value, except derivative contracts which are measured at fair value through Statement of profit and loss. These derivative contracts are currency and interest rate swap contratcts that are not traded in an active market. Their fair valuation is determined using valuation techniques that maximise the use of observable market data and rely as little as possible on entity-specific estimates and quotes received from the banks. Since all significant inputs required to fair value these derivative contracts are observable, the instruments are classified as level 2. Other than derivatives liabilities, all other financial assets and liabilities are classified as level 3.

For all the financial assets and liabilities referred above that are measured at amortised cost, their carrying amounts are reasonable approximations of their fair values. The carrying amounts of loans, trade receivables, trade payables, cash and cash equivalents, other bank balances, other financial assets,are considered to be the same as their fair values due to their short term nature.

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company has established the following fair value hierarchy that categorises the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities. The fair value of all bonds which are traded in the stock exchanges is valued using the closing price or dealer quotations as at the reporting date.

Level 2: The fair value of financial instruments that are not traded in an active market (For example traded bonds, over the counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on company specific estimates. The mutual fund units are valued using the closing Net Asset Value. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

C. Financial risk management Risk management framework

The Company’s business activities expose it to a variety of financial risks, namely credit risk, liquidity risk and market risks. The Company’s senior management and key management personnel have the ultimate responsibility for managing these risks. The Company has a process to identify and analyse the risks faced by the Company, to set appropriate risk limits and to control and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities.

i Management of the credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business.

Trade Receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. Concentrations of credit risk with respect to trade receivables are limited, due to the Company’s customer base being large. All trade receivables are reviewed and assessed for default on a regular basis. The historical experience of collecting receivables, supported by the level of default, is that the credit risk is low.

Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. The Company assesses and manages credit risk based on the Company’s credit policy. Under the Company’s credit policy, each new customer is analyzed individually for credit worthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost. For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment and including forward looking information.

The Company’s trade receivables are geographically dispersed. The Management do not believe there are any particular customers or group of customers that would subject the Company to any significant credit risks in the collection of accounts receivable.

Cash and cash equivalents

The Company is also exposed to credit risks arising on cash and cash equivalents and term deposits with banks. The Company believes that its credit risk in respect to cash and cash equivalents and term deposits is insignificant as funds are invested in term deposits at pre -determined interest rates for specified period of time. For cash and cash equivalents and other bank balances, only high rated banks are accepted.

Other Financial Assets:

The Company periodically monitors the recoverability and credit risks of its other financial assets including employee loans, deposits and other receivables. The Company evaluates 12 month expected credit losses for all the financial assets for which credit risk has not increased. In case credit risk has increased significantly, the Company considers life time expected credit losses for the purpose of impairment provisioning.

ii Liquidity risk

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company’s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.

The Company maintains a cautious funding strategy. This is the result of cash generated from the business. Cash flow from operating activities provides the funds to service the working capital requirement. Accordingly, low liquidity risk is perceived.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.

iii Market risk

The Company’s operations result in it being exposed to foreign currency risk on account of trade receivables, trade payables and borrowings. The foreign currency risk may affect the Company’s income and expenses, or its financial position and cash flows. The objective of the Company’s management of foreign currency risk is to maintain this risk within acceptable parameters, while optimising returns. The Company’s exposure to, and management of this risks is explained below:

The Company’s exposure to foreign currency risk at the end of the reporting period expressed in lakhs, are as follows:

Sensitivity analysis

A 10% strengthening/weakening of the respective foreign currencies with respect to functional currency of the Company would result in increase or decrease in profit or loss and equity as shown in table below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases. The following analysis has been worked out based on the exposures as of the date of statements of financial position.

If the rate is decreased by 10% then there will be increase in profit of INRS.179.83 lakhs for the year ended 31 March 2018 and INRS.265.80 lakhs for the year ended 31 March 2017.

iv Market risk - Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s short term borrowings (excluding commercial paper) with floating interest rates. For all long-term borrowings with floating rates, which are in foreign currency, the risk of variation in the interest rates is mitigated through interest rate swaps and hence, considered fixed rate borrowings. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.

Note: If the rate is decreased by 100 bps profit will increase by an equal amount.

Interest rate sensitivity has been calculated assuming the borrowings outstanding at the reporting date have been outstanding for the entire reporting period.

v Derivative instruments :

Currency and Interest Rates Swaps Contracts:

(A) Derivatives for hedging currency and interest rates, outstanding are as under:

D. Notes to the Reconciliations a First-time Adoption of Ind AS

Ind AS 101 (First-time Adoption of Indian Accounting Standards) provides a suitable starting point for accounting in accordance with Ind AS and is required to be mandatorily followed by first-time adopters. The Company has prepared the opening Balance Sheet as per Ind AS as of 1st April, 2016 (the transition date) by:

i. recognising all assets and liabilities whose recognition is required by Ind AS,

ii. not recognising items of assets or liabilities which are not permitted by Ind AS,

iii. reclassifying items from previous Generally Accepted Accounting Principles (GAAP) to Ind AS as required under Ind AS, and

iv. applying Ind AS in measurement of recognised assets and liabilities.

Ind AS 101 mandates certain exceptions and allows first-time adopters exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions in the standalone financial statements.

i. Property, plant and equipment and intangible assets were carried at historical cost in the Balance Sheet prepared in accordance with previous GAAP on 31st March, 2016. Under Ind AS, the Company has elected to regard such carrying values as deemed cost at the date of transition.

ii. Under previous GAAP, investment in subsidiaries, joint ventures and associates were stated at cost and provisions made to recognise the decline, other than temporary. Under Ind AS, the Company has considered their previous GAAP carrying amounts as their deemed cost.

b Leasehold land classified to prepaid

Under the previous GAAP, leasehold properties were presented as fixed assets and amortized over the period of the lease. Under Ind AS, such property have been classified as prepayment within noncurrent assets (current portion presented as other current assets) and have been amortised over the period of the lease, resulting in decrease in property, plant and equipment by Rs 2,134.48 lakhs as at 31 March 2017 and Rs 2,166.94 lakhs as at 1 April 2016 . Such reclassification has resulted in decrease in depreciation and amortization expense by Rs 32.46 lakhs and corresponding increase in “Rent”, but does not affect profit before tax and total profit for the year ended 31 March 2017.

c Investment property

Under the previous GAAP, Freehold land is presented under “Fixed Assets” and was carried at historical cost i. e Rs 2.73 lakhs. On transition to Ind AS, Freehold land held for undetermined future use is classified as ‘Investment property’ and the same is presented at historical cost separately in the Balance Sheet along with disclosure of its fair value at each annual reporting date. Deferred Tax Liability on the same is calculated and recognised in statement of profit and loss.

d FVTOCI financial assets

Under previous GAAP, non-current investments were stated at cost. Where applicable, provision was made to recognise a decline, other than temporary, in valuation of such investments. Under Ind AS, equity instruments have been classified as Fair Value through Other Comprehensive Income (FVTOCI) through an irrevocable election at the date of transition.

e Actuarial gains and losses

Under previous GAAP, actuarial gains and losses related to the defined benefit schemes for gratuity were recognised in profit or loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability / asset which is recognised in OCI. Consequently, the tax effect of the same has also been recognised in OCI instead of profit or loss. However, this has no impact on the total comprehensive income and total equity as on 1 April 2016 or as on 31 March 2017.

f Interest free rent deposits

Under previous GAAP, interest free rent deposits given was carried at cost. Under Ind AS, such interest free deposit are measured at fair value . Difference between fair value and deposit amount is recognised as “Deferred Lease Expense” at initial recognition and amortised over the period of lease on straight line basis. Deposit shall be measured at amortised cost subsequently by recognising interest income.

g Excise Duty

Under previous GAAP, revenue from sale of products was presented net of excise duty under revenue from operations. Whereas, under Ind AS, revenue from sale of products includes excise duty. The corresponding excise duty expense is presented separately on the face of the statement of profit and loss. The change does not affect total equity as at 1 April 2016 and 31 March 2017, profit before tax or total profit for the year ended 31 March 2017.

h Sales discount

Under previous GAAP, Volume discounts and promotional discounts given through credit notes were recorded as sales promotion expenses. Whereas, as per Ind AS, schemes and discounts are reduced from revenue.This does not affect profit or equity.

i Trade payables - Discounted bills/ Buyer’s credit

Under Previous GAAP, Hundi/ buyer’s credit availed from bank were presented as part of trade payables and expenses. Whereas as per Ind AS, bills discounted and buyers’ credit availed is presented as short term borrowing since it’s an arrangement between bank and the Company and interest expense is borne by Company.

j Cross Currency Interest Rate Swap and External Commercial Borrowings

Under Previous GAAP, both the instruments i.e. ECB and CCIRS are accounted as one instrument, and therefore, ECB loan is recorded in INR, Interest expenses is recognised based on the fixed interest rate as per CCIRS and Derivative assets/ liability is not recorded.

As per Ind AS, both the instruments ECB and CCIRS are recognised separately, ECB is measured at amortised cost in USD and translated to INR,Interest expenses is recorded in USD and translated into INR, Balance of ECB loan and interest payable is retranslated into INR using applicable spot exchange rate at each reporting date and Derivative assets/ liability is measured at its fair value.

k Deposits received

The Company has received deposits from distributors and C&F agents which were classified under “non-current liability” under previous GAAP based on past trends/ experience of withdrawal of such deposits from the Company.. Since,the arrangement between the parties can be terminated by either party by giving an advance notice of 30 to 60 days and then deposit shall be repaid by the Company the same has been classified as “Current Liability” as per Ind AS 1.

l Classification between financial and non financial assets/liabilities

Under previous GAAP, there were no requirement to present financial assets and liabilities separately from other assets and other liabilities. Whereas as per Ind AS, Financial assets and financial liabilities are presented separately from other assets and other liabilities

m Embedded Lease

Under previous GAAP, fixed charges paid to C&F agents is recorded as freight cost.Whereas as per Ind AS, since the arrangement involves a lease of warehouse and related assets, fixed charges paid to C&F agents for right to use their warehouse facility is recorded as rent expenses.

n Deferred Tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind-AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base.

9 SEGMENT REPORTING

The Company is in the business of manufacturing, trading and selling of stationery. It manufactures art material, marker pens, inks, pencils and others stationery products. The Management is of the view that the risks and returns for these products are not significantly different. Accordingly, the Company has a single reportable segment which is reviewed by Chief Operating Decision Maker (CODM). Further, export sales are not significant and there is no reportable secondary segment.

10 DISCLOSURE ON SPECIFIED BANK NOTES (SBNS) :

During the yeaRs.2016-17, the Company had specified bank notes or other denomination notes as defined in the MCA notification G.S.R. 308(E) dated 31 March 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from 8 NovembeRs.2016 to 30 DecembeRs.2016. The denomination wise SBNs and other notes as per the notification is given below:

11 CORPORATE SOCIAL RESPONSIBILITY EXPENDITURE

As per Section 135 of the Companies Act 2013, the Group has formed a Corporate Social Responsibility (CSR) Committee. The CSR Committee approved CSR Policy where certain focus areas out of list of activities covered in Schedule VII of the Companies Act 2013, have been identified to incur CSR expenditure


Mar 31, 2017

1. Terms/rights attached to equity shares

The Company has only one class of equity shares with a par value of Re. 1/- per share. Each holder of equity share is entitled to one vote per share.

The Company declares and pays dividends in Indian Rupees. The dividend proposed by The Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to number of equity shares held by the shareholders.

2. Details of shareholders holding more than 5% shares in the Company

Other than Kokuyo Co. Ltd, there are no shareholders holding more than 5% shares in the Company.

2. Long term borrowing comprise

3. External Commercial borrowing (ECB) from Bank of Tokyo-Mitsubishi UFJ, Ltd. Singapore The terms of the loan are as follows:

4. Rate of Interest is based on LIBOR plus agreed spread.

5. Repayable on 8 equal half yearly installments starting from April 22, 2014 with last installment payable on October 18, 2017

6. External Commercial borrowing (ECB) from Sumitomo Mitsiu Banking Corporation

The terms of the loan are as follows:

7. Rate of Interest is based on LIBOR plus agreed spread.

8. Repayble on 8 equal half yearly installments starting from September 2, 2017 with last installment payable on March 2,2021.

9. The secured loan from bank is a vehicle loan the key terms of which are as follows:

10. Rate of Interest is 10.25 %

11. Repayable in monthly installments starting from December 2014 with last installment payable on November 7, 2019.

12. Secured against hypothecation of vehicle.

13. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

14. Contingent Liabilities:

15. Claims against the Company not acknowledged as debts Rs.1,160.85 lakhs (Rs.293.06 lakhs).

16. Other money to which the Company is contingently liable is Nil (Rs. Nil)

17. Bank Guarantees as at March 31, 2017 Rs.159.93 lakhs (Rs.93.93 lakhs)

18. Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.1,011.07 lakhs (Rs.4,474.35 lakhs)

19. EXCISE REMISSION AT JAMMU :

20. The Jammu and Kashmir High Court delivered a judgment dated December 23, 2010 quashing the Excise Notification, applicable to the undertakings set up in Jammu, which restricted the quantum of excise duty remission and upheld the entitlement to total exemption from excise duty. In view of the legal advice confirming the Company''s right to such total exemption on the grounds laid down in the judgment of the High Court, rebate of excise duty being the duty on assessable value of goods, net of Cenvat Credit has been recognized in the books till Feb 2013.

21. A writ petition was filed by the Company praying the quashing of the impugned notification in its case. Pending final disposal of the petition filed by the Company, the Hon''ble High Court had modified the earlier interim order, passed on May 4, 2011, in OWP 601/2011 on March 11, 2013. Consequently the Hon''ble High Court has directed the department to release 50% of the amount due to the manufacturers, subject to the approval of Jurisdictional Commissioner of Excise for manufacturers'' solvency. Post such order the Company has claimed excise rebate as per the earlier quashed notification. The Excise duty remission of Rs.322.19 lakhs (Rs.293.09 Lakhs) for the year is recognized as revenue and accrued as income from operations. The cumulative amount of remission as on March 31, 2017, so recognized is Rs.2,400.60 lakhs (Rs.2,078.41 lakhs).

22. UTILISATION OF PROCEEDS OF RIGHTS ISSUES :

On September 2, 2013, the Company pursuant to its right issue of equity shares allotted 31,283,831 Equity Shares of face value of Re. 1 /- each to the eligible equity shareholders in the ratio of 14 equity shares for every 29 equity shares held on the record date i.e. August 2, 2013 at a price ofRs.33/- per share (inclusive of Share Premium of Rs.32/- per share). The aggregate amount collected pursuant to the rights issue was Rs.10,323.66 lakhs.

23. MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006 :

The amount due to Micro and Small Enterprises as defined in the “The Micro, Small and Medium Enterprises Development Act, 2006" has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosure relating to Micro and Small Enterprises as at March 31, 2017 are as under:

24. LEASES:

The Company has taken various office premises/godowns/residential fiats (including furniture & fixtures) under leave and license agreements ranging under 12 months to 3 years on leave and license. These arrangements are renewable by mutual consent on mutually agreed terms. These lease payments are recognized in the statement of profit and loss under rent.

25 RETIREMENT BENEFITS:

Defined Contribution Plans

Company''s contributions paid/payable during the year to Provident Fund, Superannuation Fund are organized in the Statement of Profit and Loss.

Defined Benefit Plan

Company’s liabilities towards gratuity and leave encashment are determined on actuarial basis using the projected unit credit method, which consider each period of service as giving rise to an additional unit of benefit and measure each unit separately to build up the final obligation. Past services are organized on straight-line basis over the average period until the amended benefits become vested. Actuarial gain and losses are organized immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flow using a discount rate that is determined by reference to market yields at the Balance Sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

Retirement Benefits Gratuity

Description of the Plan

The Company has covered its gratuity liability by a Group Gratuity Policy named ‘Employee Group Gratuity Assurance Scheme’ issued by LIC of India. Under the plan, employee at retirement is eligible for benefit, which will be equal to 15 days salary for each completed year of service. Thus, it is a defined benefit plan and the aforesaid insurance policy is the plan asset.

26. DISCLOSURE ON SPECIFIED BANK NOTES (SBNs):

During the year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December 30, 2016, the denomination wise SBNs and other notes as per the notification is given below:

* For the purposes of this clause, the term ‘Specified Bank Notes'' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016."

** Permitted receipts pertains to SBN’s returned by contract workers from wages paid by the Company to them as on 7th November 2016.

27 SEGMENT REPORTING - BASIS OF INFORMATION:

As the entire operations of the Company relate to products categorized under ‘Consumer Products'' as the single primary reportable segment, no separate segment reporting is required under Accounting Standard (AS-17) issued by the Institute of Chartered Accountants of India (ICAI).

28. Previous year''s figures, shown separately as such or in brackets are recast / regrouped wherever necessary.


Mar 31, 2016

1 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

i. Contingent Liabilities:

1. Claims against the Company not acknowledged as debts Rs, 293.06 lacs (Rs, 332.88 lacs).

2. Other money for which the Company is contingently liable is Nil (Rs, 14.39 lacs).

3. Bank Guarantees as at March 31, 2016 Rs, 93.93 lacs (Rs, 76.03 lacs).

ii. Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs, 4474.35 lacs (Rs, 3,240.33 lacs)

2. EXCISE REMISSION AT JAMMU :

a. The Jammu and Kashmir High Court delivered a judgment dated December 23, 2010 quashing the Excise Notification, applicable to the undertakings set up in Jammu, which restricted the quantum of excise duty remission and upheld the entitlement to total exemption from excise duty. In view of the legal advice confirming the Company''s right to such total exemption on the grounds laid down in the judgment of the High Court, rebate of excise duty being the duty on assessable value of goods, net of Cenvat Credit of Rs, 293.09 lacs (Rs, 306.20 lacs), is recognized as revenue and accrued as income from operations. The cumulative amount of remission as on March 31, 2016, so recognized is Rs, 2,078.41 lacs (Rs, 1,785.31 lacs).

b. A writ petition was filed by the Company praying the quashing of the impugned notification in its case. Pending final disposal of the petition filed by the Company, the Hon''ble High Court had modified the earlier interim order, passed on May 4, 2011, in OWP 601/2011 on March 11, 2013. Consequently the Hon''ble High Court has directed the department to release 50% of the amount due to the manufacturers, subject to the approval of Jurisdictional Commissioner of Excise for manufacturers'' solvency. Post such order the Company has claimed excise rebate as per the earlier notification.

3. UTILISATION OF PROCEEDS OF RIGHTS ISSUES :

On September 2, 2013, the Company pursuant to its right issue of equity shares allotted 31,283,831 Equity Shares of face value of Re. 1/- each to the eligible equity shareholders in the ratio of 14 equity shares for every 29 equity shares held on the record date i.e. August 2, 2013 at a price of Rs, 33/- per share (inclusive of Share Premium of Rs, 32/- per share). The aggregate amount collected pursuant to the rights issue was Rs, 10,323.66 lacs.

4. MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006 :

The amount due to Micro and Small Enterprises as defined in the "The Micro, Small and Medium Enterprises Development Act, 2006" has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosure relating to Micro and Small Enterprises as at March 31, 2016 are as under:

5. LEASES:

The Company has taken various office premises/god owns/residential flats (including furniture & fixtures) under leave and license agreements ranging under 12 months to 3 years on leave and license. These arrangements are renewable by mutual consent on mutually agreed terms. These lease payments are recognized in the statement of profit and loss under rent.

6. RETIREMENT BENEFITS:

Defined Contribution Plans

Company''s contributions paid/payable during the year to Provident Fund, Superannuation Fund are recognized in the Statement of Profit and Loss.

Defined Benefit Plan

Company''s liabilities towards gratuity and leave encashment are determined on actuarial basis using the projected unit credit method, which consider each period of service as giving rise to an additional unit of benefit and measure each unit separately to build up the final obligation. Past services are recognized on straight-line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognized immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flow using a discount rate that is determined by reference to market yields at the Balance Sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

Retirement Benefits Gratuity

Description of the Plan

The Company has covered its gratuity liability by a Group Gratuity Policy named ‘Employee Group Gratuity Assurance Scheme'' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit, which will be equal to 15 days salary for each completed year of service. Thus, it is a defined benefit plan and the aforesaid insurance policy is the plan asset.

Leave encashment:

The accumulated balance of leave encashment (unfunded) provided in the books as at year end is Rs, 246.68 lacs (Rs, 161.01 lacs) determined on actuarial basis using projected unit credit method.

7. RELATED PARTIES DISCLOSURES : (AS CERTIFIED BY THE MANAGEMENT)

a Name of related parties and nature of relationship

1 Kokuyo Co. Ltd.1 Holding Company

Kokuyo S&T Co. Ltd* Holding Company upto September 30, 2015

2 Camlin International Ltd. Subsidiary

b Name of other related parties and nature of relationship where there are transactiosn with related parties

3 Kokuyo Commerce (Shanghai) Co., Ltd.

-Fellow Subsidiary

4 Kokuyo Riddhi Paper Products Pvt. Ltd.

5 Excella Pencils Ltd.

6 Camlin Fine Sciences Ltd.

Entities over which KMPs /directors and/or

7 Nilmac Packaging Industries Ltd.

-their relatives are able to exercise significant

8 Triveni Pencils Ltd. . „ -influence

9 Mayur Colours Ltd.

10 Dandekar Inks & Adhesives Ltd.

* Due to inadequacy of profits, the Company sought to file an application for approval of revised Managerial Remuneration effective from 1st February 2016 as approved by the Compans Shareholders vide special resolution dated 28th March 2016.

The filing is pending in view of technical issues with the MCA website. Pending approval of Central Government, the remuneration paid and expensed in the financial results of financial year 2015

16 is in excess of the applicable limits of Schedule V of the Companies Act 2013 by '' 2.36 lacs.

8. SEGMENT REPORTING:

As the entire operations of the Company relate to products categorized under ‘Consumer Products'' as the single primary reportable segment, no separate segment reporting is required under Accounting Standard (AS-17) issued by the Institute of Chartered Accountants of India (ICAI).

9. Previous year''s figures, shown separately as such or in brackets are recast / regrouped wherever necessary.

Shares of the Company previously held by Kokuyo S&T Co. Ltd ,which was a Wholly Owned Subsidiary of Kokuyo Co. Ltd which merged with Kokuyo Co. Ltd since October 1, 2015

c Key Management Personnel and their Relatives

Name of the Person Nature of Relationship Key Management Personnel

Mr. Dilip Dandekar Chairman & Executive Director (C& ED)

Mr. Shriram Dandekar Vice Chairman & Executive Director (VC & ED)

Mr. Nobuchika Doi Executive Director

Mr. Takeo Iguchi Executive Director

Mr. A. Srikanth Chief Executive Officer

Mr. Chetan Badal Chief Financial Officer

Mr. Ravindra Damle V.P. (Corporate) & Company Secretary

Relatives

Mr. Subhash. Dandekar Chairman Emeritus and brother of C & ED

Mrs. Aditi Dighe General Manager -Marketing (Colour Group 2) and daughter of C& ED


Mar 31, 2015

(i) Terms/rights attached to equity shares

The Company has only one class of equity shares with a par value of '' 1/- per share. Each holder of equity share is entitled to one vote per share.

The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive any of the remaining assets of the company after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to number of equity shares held by the shareholders.

2. Contingent Liabilities and Commitments (to the extent not provided for)

i. Contingent Liabilities:

1. Claims against the Company not acknowledged as debts Rs. 332.88 lacs (Rs. 232.26 lacs).

2. Other money for which the Company is contingently liable Rs. 14.39 lacs (Rs. 14.39 lacs).

3. Bank Guarantees as at 31st March, 2015 Rs. 76.03 lacs (Previous year Rs. 41.50 lacs).

ii. Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 3,240.33 lacs (Rs. 579.05 lacs).

3. Excise Remission at Jammu:

The Jammu and Kashmir High Court delivered a judgment dated December 23, 2010 quashing the Excise Notification, applicable to the undertakings set up in Jammu, which restricted the quantum of excise duty remission and upheld the entitlement to total exemption from excise duty. In view of the legal advice confirming the Company''s right to such total exemption on the grounds laid down in the judgment of the High Court, rebate of excise duty being the duty on assessable value of goods, net of Cenvat Credit of Rs. 306.20 lacs (Rs. 288.86 lacs), is recognized as revenue and accrued as income from operations. The cumulative amount of remission as on March 31,2015, so recognised is Rs. 1785.31 lacs (Rs. 1,479.11 lacs).

A writ petition was filed by the Company praying the quashing of the impugned notification in its case. Pending final disposal of the petition filed by the Company, the Hon''ble High Court had modified the earlier interim order, passed on May 4, 2011, in OWP 601/2011 on March 11,2013. Consequently the Hon''ble High Court has directed the department to release 50% of the amount due to the manufacturers, subject to the approval of Jurisdictional Commissioner of Excise for manufacturers'' solvency.

4. Utilisation of proceeds of Rights issue:

On September 2, 2013, the Company pursuant to its rights issue of equity shares allotted 31,283,831 Equity Shares of face value of Rs. 1/- each to the eligible equity shareholders in the ratio of 14 equity shares for every 29 equity shares held on the record date i.e. August 2, 2013 at a price of Rs. 33/- per share (inclusive of Share Premium of Rs. 32/- per share). The aggregate amount collected pursuant to the rights issue was Rs. 10,323.66 lacs.

5. Leases:

The Company has taken various office premises/godowns/residential flats (including furniture & fixtures) under leave and license agreements ranging under 12 months to 3 years on leave and license. These arrangements are renewable by mutual consent on mutually agreed terms. These lease payments are recognized in the statement of profit and loss under rent.

6. Retirement Benefits:

Defined Contribution Plans

Company''s contributions paid/payable during the year to Provident Fund, Superannuation Fund are recognised in the Statement of Profit and Loss.

Defined Benefit Plan

Company''s liabilities towards gratuity and leave encashment are determined on actuarial basis using the projected unit credit method, which consider each period of service as giving rise to an additional unit of benefit and measure each unit separately to build up the final obligation. Past services are recognised on straight-line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flow using a discount rate that is determined by reference to market yields at the Balance Sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

Retirement Benefits Gratuity

Description of the Plan

All Employees at retirement is eligible for benefit, which will be equal to 15 days salary for each completed year of service. Plan assets of the gratuity fund comprise entirely of amounts invested in a Group Gratuity Policy issued by LIC of India. The information on the allocation of gratuity fund into major asset classes and the expected return on each major class is not readily available. The management understands the assets in the fund are well diversified.

Leave encashment:

The accumulated balance of leave encashment (unfunded) provided in the books as at year end is Rs. 161.01 lacs (Previous year - Rs. 140.91 lacs) determined on actuarial basis using projected unit credit method.

7. Segment Reporting:

The Company is engaged in the business of dealing in "Consumer Products". Hence, separate segment reporting has not been made under Accounting Standard (AS) 17 -"Segment reporting" issued by the Institute of Chartered Accountants of India (IcAl). The Operations of the company comprise a single geographical segment, India.

8. Prior year comparatives

Previous year''s figures, shown separately as such or in brackets are recast/regrouped wherever necessary.


Mar 31, 2014

1. Contingent Liabilities and Commitments (to the extent not provided for)

i. Contingent Liabilities:

1. Claims against the Company not acknowledged as debts Rs. 232.26 lacs (Rs. 183.36 lacs).

2. Other money for which the Company is contingently liable Rs. 14.39 lacs (t 34.78 lacs).

ii. Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 579.05 lacs (Rs. 530.41 lacs).

2. Excise Remission at Jammu:

a. The Jammu and Kashmir High Court delivered a judgment dated December 23, 2010 quashing the Excise Notification, applicable to the undertakings set up in Jammu, which restricted the quantum of excise duty remission and upheld the entitlement to total exemption from excise duty. In view of the legal advice confirming the Company''s right to such total exemption on the grounds laid down in the judgment of the High Court, rebate of excise duty being the duty on assessable value of goods, net of Cenvat Credit of Rs. 288.86 lacs (Rs. 411.45 lacs), is recognized as revenue and accrued as income from operations. The cumulative amount of remission as on March 31, 2014, so recognised is Rs. 1,479.11 lacs (Rs. 1,190.25 lacs).

b. A writ petition was filed by the Company praying the quashing of the impugned notification in its case. Pending final disposal of the petition filed by the Company, the Hon''ble High Court had modified the earlier interim order, passed on May 4, 2011, in OWP 601/2011 on March 11, 2013. Consequently the Hon''ble High Court has directed the department to release 50% of the amount due to the manufacturers, subject to the approval of Jurisdictional Commissioner of Excise for manufacturers'' solvency.

3. Equity Shares:

On September 2, 2013, the Company pursuant to its right issue of equity shares allotted 312,83,831 Equity Shares of face value of Rs. 1/- each to the eligible equity shareholders in the ratio of 14 equity shares for every 29 equity shares held on the record date i.e. August 2, 2013 at a price of Rs. 33/- per share (inclusive of Share Premium of Rs. 32/- per share). The aggregate amount collected pursuant to the rights issue was Rs. 10,323.66 Lacs.

4. The disclosures in respect of Employees Stock Option Scheme which are outlined in this year''s Annexure to the report of Directors and report on Corporate Governance are treated as an annexure to these accounts.

5. In the Board meeting held on 20th March 2014, the Company decided to exit from its loss-making business of running preschools and as a result sell its entire holding in the Wholly Owned Subsidiary (''WOS''), Alpha kids Learning & Activity Centre Limited (formerly Camlin Alpha kids Ltd). The Board also took a decision to fully write off the amounts advanced to this subsidiary in the earlier years aggregating Rs. 305.32 lacs which is exceptional in nature.

The Investments made in this WOS, i.e. Equity Capital of Rs. 130 lacs & Preference Capital of Rs. 100 lacs have been sold to Mr. Dilip Dandekar & his associate Company/relatives for a purchase consideration of Rs. 50 lacs in April, 2014. This sale is subject to ratification by shareholders. As a consequence, the shortfall of Rs. 180 lacs has been fully provided for and is also included as an exceptional item.

iv. Retirement Benefits:

Defend Contribution Plans

Company''s contributions paid/payable during the year to Provident Fund, Superannuation Fund are recognised in the Statement of Profit and Loss.

Defend Benefit Plan

Company''s liabilities towards gratuity and leave encashment are determined on actuarial basis using the projected unit credit method, which consider each period of service as giving rise to an additional unit of benefit and measure each unit separately to build up the final obligation. Past services are recognised on straight-line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash fowl using a discount rate that is determined by reference to market yields at the Balance Sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defend benefit obligation.

Retirement Benefits

Gratuity

Description of the Plan

The Company has covered its gratuity liability by a Group Gratuity Policy named ''Employee Group Gratuity Assurance Scheme'' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit, which will be equal to 15 days salary for each completed year of service. Thus, it is a defend benefit plan and the aforesaid insurance policy is the plan asset.


Mar 31, 2013

1. Contingent Liabilities and Commitments (to the extent not provided for) i. Contingent Liabilities:

1. Claims against the Company not acknowledged as debts: Rs. 183.36 Lacs (Rs. 317.97 Lacs).

2. Other money for which the Company is contingently liable: Rs. 34.78 Lacs (Rs. 23.42 Lacs).

ii. Commitments:

1. Estimated amount of contracts remaining to be executed on capital account and not provided for: Rs. 530.41 Lacs (Rs. 291.95 Lacs)

2. Corporate guarantees given to the banker of a related party ColArt Camlin Canvas Pvt. Ltd.: Rs. Nil (Rs. 150 Lacs)

2. Excise Remission at Jammu:

a. The Jammu and Kashmir High Court delivered a judgment dated December 23, 2010 quashing the Excise Notification applicable to the undertakings set-up in Jammu. The notification restricted the quantum of excise duty remission and the Jammu and Kashmir High Court upheld the entitlement to total exemption from excise duty. The Company has obtained legal advice which confirms the company''s right to such total exemption and in terms of the judgment of the High Court, rebate of excise duty, being the duty on assessable value of goods, net of CENVAT credit of Rs. 411.45 Lacs (Rs. 335.17 Lacs), is recognised as revenue and accrued as income from operations. The cumulative amount of remission as on March 31,2013 so recognised isRs. 1190.25 Lacs (Rs. 778.80 Lacs).

b. A writ petition was filed by the company in the Jammu and Kashmir High Court praying for quashing of the notification. Pending final disposal of the petition filed by the company, the Jammu and Kashmir High Court had modified the earlier interim order, issued on May 4, 2011, in OWP 601/2011 on March 11,2013. Consequently, the Jammu and Kashmir High Court has directed the excise department to release 50% of the amount due to the manufacturers, subject to the approval of the Jurisdictional Commissioner of Excise to ensure liquidity and solvency of the manufacturers.

3. Equity Shares:

i. During the preceding year 2011-12, the company had allotted 69,34,000 equity shares ofRs. l/-each at a price of Rs. 85/- per share (inclusive of share premium of Rs. 84/- per share) aggregating to Rs. 5,893.90 Lacs on preferential basis to KOKUYO S&T Co., Ltd. on the terms and conditions approved by the members at the Extra Ordinary General Meeting held on June 29, 2011.

ii. The utilisation of funds received by way of preferential allotment is as under:

4. Managerial Remuneration

The Company has sought approval of the Central Government in relation to managerial remuneration paid to the Whole-time Directors/Managing Director/Manager. The approval is awaited.The details of the same are as under:

a. Remuneration to resident Whole-time Directors, including Managing Directors, aggregating to Rs. 32.24 Lacs as waiver of excess remuneration paid for the financial year 2011-12 in view of inadequacy of profits for the year.

b. Remuneration to resident Whole-time Directors, including Managing Directors, aggregating to Rs. 185.75 Lacs as minimum remuneration, in view of inadequacy of profits for the financial year 2012-13.

c. Appointment and payment of remuneration to Whole-time Directors/Manager with effect from February 01, 2013 for the period of three years as approved by the members byway of passing special resolution through postal ballot on March 28, 2013.

5. Micro, Small and Medium Enterprises Development Act, 2006:

The amount due to Micro and Small Enterprises as defined in the "The Micro, Small and Medium Enterprises Development Act, 2006" (MSMED Act) has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosure relating to Micro and Small Enterprises as at March 31, 2013 are as under:

6. The disclosures in respect of Employees'' Stock Option Scheme which are outlined in this year''s Annexure to the Directors Report and the Report on Corporate Governance, are treated as an annexure to these accounts.

7. The Board of Directors, in its meeting held on August 7, 2012, had approved issue of equity shares on rights basis to its existing shareholders, for an issue size not exceeding Rs. 110 Crores.The Company has filed a draft letter of offer with the Securities Exchange Board of India (SEBI) on March 28, 2013 and is awaiting its observations on the same. Expenditure of Rs. 38.81 Lacs related to the said issue is carried in ''Other Advances'' under''Short-term Loans and Advances''.

8. Previous year''s figures, shown separately as such or in brackets are recast/regrouped wherever necessary.


Mar 31, 2012

Contingent Liabilities and Commitments (to the extent not provided for)

i. Contingent Liabilities:

1. Claims against the Company not acknowledged as debts Rs 317.97 Lacs (Rs 309.79 Lacs).

2. Other money for which the Company is contingently liable Rs 23.42 Lacs (Rs 26.73 Lacs).

ii. Commitments:

1. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs 291.95 Lacs (Rs 216.40 Lacs).

2. Corporate Guarantees given to the banker of a Related Party ColArt Camlin Canvas Pvt. Ltd. Rs 150.00 Lacs (Rs 150.00 Lacs).

1. Excise Remission at Jammu:

a. The Hon'ble Jammu and Kashmir High Court delivered a judgment dated December 23,2010 quashing the Excise Notification, applicable to the undertakings set up in Jammu, which restricted the quantam of excise duty remission and upheld the entitlement to total exemption from excise duty. In view of the legal advice confirming the Company's right to such total exemption on the grounds laid down in the judgment of the High Court, rebate of excise duty, being the duty on assessable value of goods, net of Cenvat Credit on inputs, of Rs 335.17 Lacs (Rs 443.63 Lacs), is recognized as revenue and accrued as income from the operations. The cumulative amount of remission as on March 31, 2012, so recognized is Rs 778.80 Lacs (Rs 443.63 Lacs).

b. A writ petition was also filed by the Company praying the quashing the impunged notification in its case. Pending the final disposal of the petition filed by the Company, the Hon'ble High Court has directed the authorities to refrain from giving effect to the said notification in its case.

2. Equity Shares:

a. During the year, the Company has allotted 69,34,000 Equity Shares of Rs 1/- each at a price of Rs 85/- per share (inclusive of Share Premium of Rs 84/- per share) aggregating to Rs 5,893.30 Lacs on Preferential basis to KOKUYO S&T Co., Ltd. on the terms and conditions approved by the Members at the Extra Ordinary General Meeting held on June 29th, 2011. The Company has also allotted 9,03,038 Equity Shares of Rs 1/- each at a price of Rs 16/- per share to its employees under "Camlin Employees Stock Option Scheme 2008"(ESOP 2008).Accordingly the paid up capital of the Company increased from Rs 610.65 Lacs to Rs 689.02 Lacs and share premium has increased from Rs 2139.68 Lacs to Rs 8,040.20 Lacs.

3. Managerial Remuneration:

Approvals of the Central Government under the applicable provision of the Companies Act are awaited in respect of the following:

a. Remuneration to resident whole-time Directors, including Managing Director, aggregating to Rs 202.63 Lacs, as minimum remuneration, in view of inadequacy of profits for the year.

b. Remuneration of Rs 83.04 Lacs to the non-resident Directors.

4. The disclosures in respect of Employees Stock Option Scheme which are outlined in this year's Annexure to the report of the Directors and report on Corporate Governance are treated as an annexure to these accounts.

iv. Retirement Benefits:

Defined Contribution Plans

Company's contributions paid/payable during the year to Provident Fund, Superannuation Fund are recognized in the Profit and Loss Account.

Defined Benefit Plan

Company's liabilities towards gratuity and leave encashment are determined on actuarial basis using the projected unit credit method, which consider each period of service as giving rise to an additional unit of benefit and measures each unit separately to build up the final obligation. Past services are recognized on straight-line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognized immediately in the Statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flow using a discount rate that is determined by reference to market yields at the Balance Sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

Retirement Benefits Gratuity

Description of the Plan

The Company has covered its gratuity liability by a Group Gratuity Policy named 'Employee Group Gratuity Assurance Scheme' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit, which will be equal to 15 days salary for each completed year of service. Thus, it is a defined benefit plan and the aforesaid insurance policy is the plan asset.

5. Previous year's figures, shown separately as such or in brackets, are recast/regrouped wherever necessary.


Mar 31, 2011

A. Contingent Liabilities

i. In respect of Guarantees issued on behalf of the Company by its Bankers to the extent of Rs. 16.00 Lacs (2009-2010- Rs.2.10 Lacs).

ii. Corporate Guarantees given to ColArt Camlin Canvas Pvt. Ltd. Rs.150.00 Lacs (2009-2010 Rs. 150.00 Lacs).

iii. Demands against the Company, either disputed or not acknowledged as debts and not provided for: (Rs. Lacs) 2010-11 2009-10 a. Income Tax 112.61 136.29

b. Sales Tax 126.98 69.54

c. Excise/Custom Duty 77.37 74.06

d. Service Tax 1.89 1.89

e. Labour Matters 10.05 8.13

f. Others 7.63 0.63

iv. Incremental wage demands in respect of Tarapur plant following the expiry of the earlier settlement- amount unascertainable.

C. Commitments

Value of contracts (net of advance) remaining to be executed on capital account not provided for Rs. 216.40 Lacs (2009-2010 Rs. 182.70 Lacs).

D. Secured Loans

Term Loans from Banks are secured by mortgage/hypothecation of related immovable/movable assets of the Company, both present and future.

Working Capital Loans from Banks are secured by hypothecation of stocks and book debts ranking pari-passu between them as also mortgage/hypothecation of specified Immovable and Movable Fixed Assets of the Company ranking pari-passu by way of Second Charge.

Vehicle Loans are secured by hypothecation of related vehicles.

E. Investment in/advances to Associate Company

The Company holds shares in ColArt Camlin Canvas Pvt. Ltd. at a carrying cost of Rs. 52.20 Lacs and has given advance (including interest accrued thereon) of Rs. 54.47 Lacs to the said Company. The net worth of the said Company stands eroded by accumulated losses. The turnaround business plans

have failed to bear fruition. Therefore, provision is made for decline the value of investments as also for the apprehended non-realisability of the advance. Accordingly, as amount of Rs. 106.67 Lacs is provided in the Profit and Loss Account and shown as an exceptional item therein.

F. Loans And Advances

Staff Advances include Loans/Advances due from Officers Rs. Nil (2009-2010 - Rs. Nil) Maximum balance Rs. Nil (2009-2010 -Rs. Nil).

H. Managerial Remuneration

ii. In view of the inadequacy of profits, the managerial remuneration is in excess of the limits laid down in Section 309 of the Companies Act, 1956 by Rs. 56.82 lacs. A special resolution will be proposed in the ensuing Annual General Meeting seeking the shareholders sanction and approval of the Central Government, to consider the total remuneration paid as the minimum remuneration.

iv. Retirement benefits

Defined contribution Plans

Companys contributions paid/payable during the year to Provident Fund, Superannuation Fund are recognised in the Profit and Loss Account.

Defined Benefit Plan

Companys liabilities towards gratuity and leave encashment are determined on actuarial basis using the projected unit credit method, which consider each period of service as giving rise to an additional unit of benefit and measures each unit separately to build up the final obligation. Past services are recognised on straight-line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the Statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flow using a discount rate that is determined by reference to market yields at the Balance Sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

Retirement Benefits Gratuity

Description of the Plan

The Company has covered its gratuity liability by a Group Gratuity Policy named Employee Group Gratuity Assurance Scheme issued by LIC of India. Under the plan, employee at retirement is eligible for benefit, which will be equal to 15 days salary for each completed year of service. Thus, it is a defined benefit plan and the aforesaid insurance policy is the plan asset.

v. The Honble Jammu and Kashmir High Court delivered a judgement dated December 23, 2010 quashing the Excise Notification, applicable to the undertakings set up in Jammu, which restricted the quantam of excise duty remission and upheld the entitlement to total exemption from excise duty. In view of the legal advice conforming the Companys right to such total exemption on the grounds laid down in the judgement of the High Court, incremental remission of excise duty of Rs. 221.76 lacs is recognised as revenue in this year including Rs. 84.61 Lacs relating to earlier years and accrued as income from the operations.

A writ petition was also filed by the Company praying the quashing of the impunged notification in its case. Pending the final disposal of the petition filed by the Company, the Honble High Court has directed the authorities to refrain from giving effect to the said notification in its case.

vi. Related Parties Disclosures: (as certified by the management): (a) Associate Companies/Subsidiary Companies:

Name of the Related Party Nature of Relationship

1. Camlin North America, Inc., USA Subsidiary

2. Camlin International Ltd. Subsidiary

3. Camlin Alphakids Ltd. Subsidiary

4. ColArt Camlin Canvas Pvt. Ltd, Associate

5. CAFCO Consultants Ltd. Associate

6. Camart Industries Ltd. Associate

7. Camellia Management Services Pvt. Ltd. Associate

8. Camellia Infotech Ltd. Associate

9. Camlidhan Investments Pvt. Ltd. Associate

10. Camlink Agencies LLP. Associate

11. Camlink Consultants Pvt. Ltd. Associate

12. Dandekar Developers Pvt. Ltd. Associate

13. Dandekar Investments & Consultants Pvt. Ltd, Associate

14. Dandekar Print Pack Pvt. Ltd. Associate

15. DDI Consultants Pvt. Ltd. Associate

16. Excella Pencils Ltd. Associate

17. Camlin Fine Chemicals Ltd. Associate

18. Nilmac Packaging Industries Ltd. Associate

19. Camlidhan Enterprises Pvt. Ltd. Associate

20. Triveni Pencils Ltd Associate

21. Mayur Colours Limited Associate

22. Vibha Agencies Pvt. Ltd. Associate

(b) Key Management Personnel and their Relatives:

Name of the person Nature of Relationship

Key Management Personnel

Mr. D. D. Dandekar Chairman & Managing Director (C.M.D)

Mr. R. M. Dandekar Joint Managing Director

Mr. S. S. Dandekar Executive Director

Mr. D.M. Dandekar Executive Director

Relatives

Mr. S.D. Dandekar Chairman Emeritus and brother of C.M.D

Mrs. A.D. Dighe General Manager (Marketing) and daughter of C.M.D.

Mr. R.D. Dandekar Officer (School Activity Team & Business Development") and son of C.M.D.

L. The disclosures in respect of Employees Stock Option Scheme which are outlined in this years Annexure to the report of the Directors and report on Corporate Governance are treated as an annexure to these accounts.

M. Previous years figures are recast/regrouped wherever necessary.

23. SUPPLEMENTARY INFORMATION FORMING AN INTEGRAL PART OF THE PROFIT & LOSS ACCOUNT

Additional information pursuant to the provisions of paragraphs 3,4C & 4D of part II of Schedule VI to the Companies Act, 1956. Details of installed capacity production and sales of the goods manufactured.

* As certified by the Management and relied upon by the Auditors, this being a technical matter.

* * * Installed capacity worked out on the basis of existing product mix.

> Includes captive consumption-120420 Ltrs, 56104 kgs. (2009-2010-61,230 Ltrs., 80,869 Kgs.and 80,640 nos.). ++ Class of Goods is based on main classification given in the Industries (Development and Regulation) Act, 1951.

NOTES:

1. Figures in brackets are for the previous year.

2. The quantities mentioned in nos./packs comprise of heterogeneous packings.

3. Quantities of sales include promotional distribution and are adjusted for damaged goods and physical verification differences.


Mar 31, 2010

A. Contingent Liabilities:

i. In respect of Guarantees issued on behalf of the Company by its Bankers to the extent of Rs. 2.10 Lacs (2008 - 2009 Rs. 1.60 Lacs).

ii. Corporate Guarantees given to ColArt Camlin Canvas Pvt. Ltd. Rs. 150.00 Lacs (2008-2009 Rs. 150.00 Lacs).

iii. Demands against the Company, either disputed or not acknowledged as debts and not provided for:

(Rs. in Lacs) a. Income Tax 136.29 151.53 b. Sales Tax 69.54 62.08 c. "Excise Duty 74.06 81.37 d. Service Tax 1.89 1.89 e. abourMatters 8.13 8.13 f. Others 0.63 0.63

C. Commitments

Value of contracts (net of advance) remaining to be executed on capital account not provided for Rs. 182.70 Lacs (2008-2009 Rs. 396.30 Lacs).

D. Secured Loans

Term Loans from Banks are secured by mortgage/hypothecation of related immovable/movable assets of the Company, both present and future.

Working Capital Loans from Banks are secured by hypothecation of stocks and book debts ranking pari- passu between them as also mortgage/hypothecation of specified Immovable and Movable Fixed Assets of the Company ranking pari-passu by way of Second Charge.

Vehicle Loans are secured by hypothecation of related vehicles.

E. Investment in/advances to Associate Company

The Company holds shares in ColArt Camlin Canvas Pvt. Ltd. at a carrying cost of Rs. 52.20 Lacs and has given advance of Rs. 36.80 Lacs to the said Company. The net worth of the said Company stands eroded by accumulated losses. However, in view of the turn-around business plans implemented by the

Management of the said Company, no provision for impairment is considered necessary at this stage in respect of the investment. Likewise, the advances are expected to be realised fully and no provision is made there against.

F. Loans and Advances

Staff Advances include Loans/Advances due from Officers Rs. Nil (2008-2009 Rs. Nil) Maximum balance Rs. Nil (2008-2009 Rs. Nil).

G. The Investor Education and Protection Fund shall be credited by the following amounts as per prescribed time frame

iv. Retirement benefits:

Defined contribution Plans

Companys contributions paid/payable during the year to Provident Fund, Superannuation Fund are recognised in the Profit and Loss Account.

Defined Benefit Plan

Companys liabilities towards gratuity and leave encashment are determined on actuarial basis using the projected unit credit method, which consider each period of service as giving rise to an additional unit of benefit and measures each unit separately to build up the final obligation. Past services are recognised on straight-line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the Statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flow using a discount rate that is determined by reference to market yields at the Balance Sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

Retirement Benefits Gratuity

Description of the Plan

The Company has covered its gratuity liability by a Group Gratuity Policy named Employee Group Gratuity Assurance Scheme issued by LIC of India. Under the plan, employee at retirement is eligible for benefit, which will be equal to 15 days salary for each completed year of service. Thus, it is a defined benefit plan and the aforesaid insurance policy is the plan asset.

Until last year, the accruing liability for gratuity was estimated on actuarial basis by restricting the amount of liability to the maximum limit of Rs. 3.50 Lacs payable under the Payment of Gratuity Act. However, the Management has decided to remove the ceiling forthwith on the amount of gratuity payable to the employees. Accordingly, the accruing liability has been estimated as at the Balance Sheet date without considering any ceiling on the amount of gratuity which has resulted in the provision of past service cost of Rs. 108.73 Lacs.

vi. Micro, Small and Medium Enterprises Development Act, 2006

The amount due to Micro and Small Enterprises as defined in the "The Micro, Small and Medium Enterprises Development Act, 2006" has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosure relatinq to Micro and Small Enterprises as at 31st March, 2010 are as under:

L. The disclosures in respect of Employees Stock Option Scheme which are outlined in this years Annexure to the report of the Directors and report on Corporate Governance are treated as an annexure to these accounts.

M. Previous years figures are recast/regrouped wherever necessary.

Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X